On Wednesday, ASIC confirmed it has imposed additional licence conditions on three licences within the ASX Group all directed at “mitigating risks for future upgrades” following the outage which occurred on 16 November 2020 shortly after a major upgrade to ASX’s equity trading platform.
“The ASX outage was a very serious event, exacerbated by subsequent operational issues,” ASIC chair Joe Longo said.
“The imposition of these licence conditions will confirm that remedial actions are implemented appropriately and efficiently to address these operational issues - including for the critical rollout of the CHESS Replacement Program.”
The conditions include a requirement of remediation on ASX’s Australian market licence regarding underlying issues with the 2020 outage and an independent expert appointed by ASIC to assess ASX Clear and ASX Settlement to assess whether ASX’s assurance program for the replacement of CHESS is fit for purpose.
ASIC has also released a report into the outage which outlines the regulator’s expectations for market operators and participants, with Mr Longo adding that it will help to ensure the effective future operation of Australia’s financial markets infrastructure.
An independent review of the outage conducted by IBM Australia Limited in August found “several key shortcomings” in its system, noting “factors that suggested the ASX Trade system was not ready to go-live ... even though the formal implementation readiness processes were completed and verified by multiple parties without objection to go-live”.
IBM also suggested there were “gaps in the rigour applied to the project delivery risk” and that “risk and issue management, project compliance to ASX practices, project requirements and the project test strategy/planning did not meet accepted industry practices”.
ASX did not oppose the additional licence conditions placed on it by ASIC.